Lionsgate swung back into profitable terrain during its most recent fiscal quarter, another sign that the pandemic’s cloud is beginning to lift. But the company also announced that it could soon be slimmed down as it hopes to capitalize on the wave of consolidation in the media space, one that has already seen Amazon agree to buy Metro-Goldwyn-Meyer, Discovery announce plans to merge with WarnerMedia and Disney purchase much of 21st Century Fox.

To that end, Lionsgate announced that its board of directors has given the greenlight to its management team to explore spinning off or selling its Starz division. The company Lionsgate spent $4.4 billion to buy Starz in 2016, a move that expanded its television operations, but one that also added to its debt load.

“While we continue to realize substantial synergies from bringing Lionsgate and Starz together, we also see the opportunity to potentially unlock significant shareholder value under a scenario where investors have the ability to value our studio assets and Starz separately,” Michael Burns, Lionsgate’s vice chairman, told analysts on an earnings call. “Recent transaction multiples in the media space give us confidence that exploring alternate paths is prudent. Additionally, we believe that a number of the structures we’re considering would allow Lionsgate and Starz to preserve many of the operational benefits we’re currently achieving within a single corporate structure.”

Thanks to subscriber growth in its streaming subscribers and a series of new television shows, Lionsgate recorded net income of $7.5 million instead of the loss of $18.5 million that it reported in the year-ago period. Revenues at the media company hit $887.8 million, a nearly 20% increase from the $745 million that Lionsgate reported during the same period in 2020, a time when COVID-19 was still ravaging the entertainment landscape. Earnings per share came in at 15 cents. The earnings per share hit analysts’ projections, but the revenue figures fell short of expectations.

Like many entertainment companies, Lionsgate is trying to muscle into the crowded streaming race, and enjoying some success with its investment. The company saw a 40% year-over-year jump in subscribers to its Starz streaming services, which now top out at 18 million globally.

Lionsgate CEO Jon Feltheimer was close-lipped when it came to elaborating on the future of Starz, telling analysts that “we’re not going to put too much meat on the bone” in terms of what they’re considering. He did argue that at a time when studios and content companies are scoring eye-popping deals, Lionsgate remains “undervalued” with a market capitalization of $2.9 billion.

Lionsgate acquired Starz in 2016 as a means of expanding the scope of its television business. The purchase was designed to allow Starz to be a platform for Lionsgate to launch programs that could be sold around the world to other buyers. But the industry’s rapid shift to on-demand streaming on global platforms hampered those plans, forcing Lionsgate to invest big resources in launching Starz-branded direct-to-consumer apps in many territories. Lionsgate is unlikely to get the $4.5 billion price it paid for Starz in the current market, which is why executives emphasized looking for a structure that would allow them to still own a significant portion of the linear and digital channel group that also includes themed content channels.

Lionsgate did get bigger in the interim. During the quarter, it completed the acquisition of Spyglass Media Group’s 200 film library. That list of titles includes the likes of “The King’s Speech, “Silver Linings Playbook,” “Django Unchained” and “Inglourious Basterds.”

Cynthia Littleton contributed to this report.